SMS vs. Ever-Increasing Costs of Facebook Retargeting Ads?

Are you relying exclusively on Facebook retargeting ads to re-attract visitors to your store?

Even with the iOS 14 update, most merchants still spend 30-60% of their revenue on Facebook ads.

Look, Facebook ads are great.

But, with the growing number of businesses you need to compete with, the ever-increasing costs, and new regulations, you can’t keep all your eggs in Facebook’s basket.

We believe that a large portion of your potential customers could be retargeted through ecommerce SMS marketing in a significantly cheaper, more efficient way.

Here’s why you need to reconsider your retargeting strategy:

First: Facebook Retargeting Ads Are Getting Crazy Expensive

Most Shopify merchants agree that things are getting out of hand.

As of December 2021, the average CPC (cost per click) for Facebook ads is $1.12, and the advertising costs will increase by another 45% YoY this Black Friday and Cyber Monday.

With countless new online stores popping up as a result of the pandemic, we could notice an even steeper increase in this number.

Even if Facebook retargeting ads still bring in sales, with the ads getting more and more expensive, you’re losing money. Steady revenue and growing expenses equal less profit.

You could make up for the extra expense by raising your prices, but that could easily backfire. Unless your products are unique, your customers will turn to other stores for a more economical alternative.

Second: Customer Behavior Is Changing

The days when everybody was either on Facebook or dead are over. With a great deal of options to choose from, more and more Americans are turning to different channels. But these apps share one thing in common: they all work brilliantly on your smartphone.

And did you know that the average American checks their phone over 160 times a day?

Instead of relying on in-app ads, you need to be on your ideal customers’ screen right as they pick up their phone if you want to fight for a moment of their attention in the overwhelming amount of notifications, ads, and feeds.

Facebook ads do not qualify for this.

Third: Customer Expectations Are Changing

It was a big step in advertising history to start running targeted online ads to specific audiences instead of generic flyers and television ads that had to talk to the masses.

Yet, the evolution doesn’t stop there.

Customers now expect even more personalized and personal contact.

Instead of the old-school ads that mostly just talk at your customers, businesses today need to talk to their customers.

Your shoppers don’t mind your promotions, but they want to be a part of the conversation. They want to ask questions and share their opinion. They want to interact with you and make a choice on their own. The best promotions in 2022 enable two-way communication.

What channel can solve all three problems?

Enhance Facebook Retargeting Ads with SMS Marketing

A better way to retarget your customers in 2022 is SMS Marketing.

Did you know that over 80% of North Americans use SMS on a daily basis? SMS is flourishing and based on recent trends, the number of users is only going to increase over the next five years.

Here’s why we believe that SMS can kick Facebook retargeting ads’ ass:

• SMS is cheap. One text message costs $0.0099 per message in the United States
• People will actually read it. SMS has a 98% open rate and 60% of the recipients open the text message within 5 minutes.
• It’s unlimited. You can send as many text messages as you want, as long as you get your subscribers’ consent at the start.
• It’s immediate. SMS appears on your subscibers’ phone the second after you hit send. This enables time-sensitive campaigns. With Facebook ads, you need to wait until Facebook approves of the ad, the user opens Facebook and starts scrolling down their feed.
• It enables two-way communication. SMS is a direct channel and your customers can easily reply to you.
• High click-through rate. The average CTR for SMS is 5-30%. The average CTR for Facebook ads is 0.90%. Your call.

Sure, SMS Marketing can’t replace Facebook retargeting ads. That isn’t the goal anyway.

You can’t send SMS to your website visitors, unless they opted in through your pop-up form and gave you your consent previously. And even if you could, that would be unethical.

But, a well-built SMS welcome popup can capture around 9.5% of your website visitors (that’s 50-95 subscribers out of 1000 visitors a day) who you can retarget with cheaper and better-converting SMS campaigns instead of Facebook ads.

Here’s How the Numbers Look In Real Life:

Let’s say your Shopify store gets 100,000 monthly visitors.

Using Recart’s average, 9.5% of your visitors subscribe to your SMS list through the welcome popup and another 3% on your checkout page consisting of buyers and cart abandoners.

That gives you 9,500 + 3,000 new monthly subscribers, 12,500 in total.

Now you can send messages directly to these 12,500 subscribers.

You can certainly achieve up to 30% CTR with SMS, but to compare oranges to oranges, we’ll only look at the retargeting aspect of SMS marketing in this example. That is, delayed Welcome Flow messages, one-off campaigns, and post-purchase messages. In those categories summed, the average CTR is around 6% with Recart.

Assuming that you send 4 retargeting messages in the first month, with some overlapping, you’ll have 20% of people click. That is, 2,500 subscribers our of 12,500.

The total clicks in this example is 24%, or 3,000 clicks

So How Much Would It Cost?

Sending 4 messages to 12,500 people cost:

12,500 x 4 x 2 x $0.0099 = $990

You get 3,000 clicks for $990.

$990 / 3,000 = $0.3 CPC

Retargeting with Facebook Ads vs SMS – How Do They Compare?

Want More Fish? Build A Better Net

Of course, the number of website visitors you can convert to SMS subscribers depends on multiple factors. The main one being your opt-in form or popup.

No matter how great your messages are to your customers if your popup isn’t going to convince them to sign up in the first place.

We believe that the key aspects of a successful popup are:

• A compelling opt-in offer. Why should visitors sign up? What’s in it for them? Nobody will sign up without a reason. Offer discounts, coupons, exclusive offers, even downloadable guides or gifts – whatever works best for your brand! Make sure it’s as visible as possible! After all, why would someone give you your phone number for nothing in return?

• A clear CTA. Pick one action that you’d like your visitors to perform. Use action words. Make it obvious and effortless

• A eye-catching and in-brand design. While you should reflect your store’s colors and logo on your popup, it’s also important to make it catchy! Use eye-popping color combos, interesting but relevant images, big numbers – your visitors are guaranteed to notice!

The more attractive your popup and opt-in offer is, the more likely visitors will stop and sign up.

>>Learn how to build high-converting popups and welcome messages to follow them!

Final Thoughts

We’re not telling you to cut out Facebook ads completely, but we encourage you to re-evaluate how much of your revenue do you spend on them. Even a 5-10% redistribution of retargeting ad budget opens up a massive market opportunity.

Don’t spend more for higher profits: spend smarter!

And if you want to start your SMS marketing journey the best way, get in touch for a free Recart demo!